A Spicy Start:

Jay Kailash Namkeen’s shares began trading at ₹85 on the BSE SME platform. This is a significant jump of ₹12, or 16% higher, compared to the price at which the company offered its shares to investors during its initial public offering (IPO). An IPO takes place when a company chooses to sell its shares to the public for the first time.

Lower Than Expected Sizzle:

While the listing price is good news for the company, it’s worth noting that it fell short of what some investors were anticipating. Before the listing, Jay Kailash Namkeen’s shares were trading in the unofficial market at a premium of around ₹15. This means some investors expected the price to be even higher on the official stock exchange.

What is the BSE SME Platform?

The BSE SME platform is a specialized section of the Bombay Stock Exchange designed for smaller companies to raise capital from the public. It offers a simpler and less expensive process compared to the main BSE platform.

Understanding Premiums:

A premium, in this context, refers to the difference between the price at which a company sells its shares during an IPO and the price at which those shares start trading on the stock exchange. A higher premium indicates strong investor interest in the company.

Sweet Success for Jay Kailash Namkeen?

A strong listing price suggests that investors are optimistic about Jay Kailash Namkeen’s future prospects. This can be beneficial for the company’s growth and ability to raise further funds in the future. However, it’s important to remember that stock prices can fluctuate, and past performance is not necessarily indicative of future results.

Investors Should Do Their Homework:

People considering buying Jay Kailash Namkeen shares should carefully research the company, its financials, and the snack industry before making any investment decisions. This research may involve reading the company’s IPO prospectus, news articles, and financial reports.

Overall, Jay Kailash Namkeen’s listing on the BSE SME platform is a positive development for the company. However, it’s very important for investors to do their own research before investing in any stock.

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When we pause in the markets, it means no further fall or mild rise. We take this as the call for today and see where we land.

Nifty below 17400 will result in further corrections, as we can expect many traders to take profit from the last 15% rally in the market.

Let us go with a Bull put spread and catch the decay in PE

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Here is how I see the Nifty prices.

We are at a critical juncture, if 16800 is broken, we can more selling pressure, and this may continue until 16400. A worst case can be 16000, but that should be out of reach this week.

On the upside 17700 should be crossed with a strong candle that would suggest that bulls are not yet out.

How should you trade tomorrow?

• If SGX and Asian markets open negative, and with Dow futures also being down, it will lead to an increase in the PE prices.
• So should you buy PE or short a 300 deep PE in the expectation that the market may rebound.
• My call would be
  • Buy an OTM PE – ie spot – 150 or 200.
  • Sell an OTM call – 17700 – do not sell close to ATM as gamma spikes may kill your money
  • If market appears to be stabilizing, ie the lows of the days by 2 PM (EU open time) are not breached, the can do a sell of a PE (Deep OTM).

The strategy would look like

(This will not be actual prices as the prices will be reflected real time)

If the markets do not fall, which is the concept of against the trend, it could be as simple as just buying CEs. – For scalps.

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Execution of investments without markets [passive] – such as SIPs in mutual funds, PPFs/SSY on time, NPS etc. Once the diversified portfolio is constructed, the SIPs are important, investment in other instruments such as PPF, SSY need to be timed – such as investment in the first week of the financial month – but can be setup these days as an online bank transfer.

Monitoring of markets/review of portfolio [active] – An annual review of a half yearly monitoring of your assets is important, and if you have tied up with an RIA (Registered Investment Advisor), that job is usually taken care of. This is important, as at times, during a crash there may be an urge to investment more or pull out investments, and discussion with an RIA can help.

Now, can we time a market crash and be prepared for it?

We can never time a market crash

This is how markets behave; there are phases – expansion, peak, recession and then a bottoming out of the fall and then a rise again. As simple as it can be drawn on an x-y axis, it is not possible to time a 5% or 10% or 20% market correction or crash. However, diversification of portfolio and a passive investment method where market timing is not a factor can help to prepare for the correction or crash. During the crash, what is needed is some guidance as what needs to be corrected in the portfolio based on your goals and financial life.

The biggest problem I see is that whenever a crash happens, a lot of expert comments come up on Social Media urging to either exit or buy a product or equities. While this may appeal to the general mass, the recommendation may not always be the best for you – as your goals and life is different from that of the Social Media Guru’s life.

Answer to a question posted on Quora

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The subscription by Paytm’s parent firm, One97 communications is going to be open from November 8.  Those who are interested will be able to bid till November 10. The IPO size is going to create a history being the biggest public offering and shall be of Rs.18,300 crore. Paytm’s IPO is much awaited IPOs of the year. Analysts say that it is going to be a large reception making the probable valuation of the company at $20 million. 

Link Intime India is the registrar of the issue and shall carry out the allotment process. The book running lead managers include, Axis Capital, ICICI Securities, JP Morgan India Private Limited, Morgan Stanley India Company, Goldman Sachs (India) Securities and Citigroup Global Markets India Private Limited. 

Paytm is the second notable loss-making company after food delivery firm Zomato to come up with an IPO. However, it is quite popular and this leading digital ecosystem for consumers and merchants-has been used by all of us at some point to make or receive payments. Paytm was launched in 2009 to make cashless transactions possible. It has around 34 crore registered users

You can take part in the IPO through online platform using your Dmat account.

Before doing so you may have a look at its latest financial results, valuation of the company, share holding pattern and the major ratios to depicting its performance. The services are divided into three parts 

1.Payment services to consumers

2.Payment services to merchants and, 

3.Others including financial services. 

Out of these three types of businesses, the payment services to merchants are showing a good performance as compared to payment services to consumers and other financial services. Then there are travelling ticket and Mall businesses which show a declining trend. Their cloud business has been a bit higher, but it consists of the same customer base.

When it comes to the shareholding founder Vijay Shekhar Sharma holds 14.61% and Alibaba & Ant Group holds 38%. The other major shareholders are SoftBank Vision Fund and Elevation Capital (SAIF partners) hold 18.73% and 17.65% respectively.  IPOs main aim is not focused on profitability and that’s a major point to be kept in mind. A part of the IPO will be used to pay the existing investors, who might eventually take an exit following the terms and conditions. However, Softbank Vision Fund has no plans to exit the company soon.

It we look at its earnings, the picture is not very strong. Though the losses are declining but they should be controlled in the coming years. The company is thriving to reduce losses, its merchant business has not got affected much in the first half of FY21 as far as revenue is concerned. It has reported consolidated revenue of Rs. 3186.8 crore in FY 2021 cutting down its loss to Rs.1701 crore. Since the company is making losses, it is better to use revenue multiple approach instead of price earnings share. Market cap to revenue was 36.76 for the year 2020 and 37.18 for 2021 which are considered quite high. 

The market of Digital payment system has promising future in coming days, as it is going to grow manifold in next five years span.  UPI system is also powerful making Phone pe and Google pe two largest mobile payments by value, though keeping Paytm on the third position. Due to digital payments replacing the traditional payment methods, the payments by value are going to be higher. 

The merits to be taken note of: Paytm is a trusted brand with a 6.3 billion-large consumer base, it has network first mover advantage strong proprietary, tech platform, diverse product portfolios, user friendly interface.

But negatives are: It has a history of losses, Paytm is not successful in any of its businesses this could be due to lack of focus as it is spread into many types of businesses.  Naturally it is not number one anywhere. Despite of the IPO coming this year, a few employees holding major positions have left the company.  Unlisted UPI service providers have become its major peers. As the company is doing many businesses, it has to look after many compliances like SEBI regulations, IRDA regulations etc which may be quite a lot to handle at a time.   

The biggest advantage that Paytm has is its big consumer base, merchant base is already strong it might grow bigger in the coming days. It can expand into international markets. Similarly, expansion of financial services can also be considered by the company. If there is not yet another wave of Covid-19, the threats against the company will become less. We wish the IPO turns out to be fruitful for the company.

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Gautam Adani, Chairman of the Adani Group, stated on July 13 that his company had acquired managerial control of Mumbai International Airport from the GVK Group.

Following a July 13 MIAL board meeting, the Adani Airport Holdings Limited (AAHL) assumed managerial control of MIAL from the GVK Group.

Gautam Adani said: “We are delighted to take over management of the world-class Mumbai International Airport. We promise to make Mumbai proud. The Adani Group will build an airport ecosystem of the future for business, leisure, and entertainment. We will create thousands of new local jobs.”

The company said: “With India becoming to be the world’s third-largest aviation market by 2024, the addition of the Mumbai International Airport to the Adani Group’s existing portfolio of six airports, and thereafter the operationalization of the greenfield Navi Mumbai International Airport Limited (NMIAL) provides a transformational aviation platform allowing the Adani Group to interlink its B2B and B2C business as well as create several strategic adjacencies for the Group’s other B2B businesses.

We are delighted to take over management of the world class Mumbai International Airport. We promise to make Mumbai proud. The Adani Group will build an airport ecosystem of the future for business, leisure and entertainment. We will create thousands of new local jobs.

— Gautam Adani (@gautam_adani) July 13, 2021

“Our larger objective is to reinvent airports as ecosystems that drive local economic development and act as the nuclei around which we can catalyse aviation-linked businesses. These include metropolitan developments that span entertainment facilities, e-commerce and logistics capabilities, aviation dependent industries, smart city developments, and other innovative business concepts,” said Gautam Adani.

AAHL will begin construction of the Navi Mumbai International Airport next month and expects to complete the project financially within 90 days. This brand-new international airport is scheduled to open in 2024.

AAHL, a wholly-owned subsidiary of Adani Enterprises, purchased a 23.5 percent share in the Mumbai International Airport (MIAL) earlier this year for Rs 1,685.25 crore from ACSA Global (ACSA) and Bid Services Division (Mauritius), or Bidvest.

The stake purchase was part of the Adani Group’s strategy of acquiring a majority position in MIAL.

Adani Group was recently granted licence to operate the airports in Lucknow, Jaipur, Guwahati, Ahmedabad, Thiruvananthapuram, and Mangaluru via a public-private partnership (PPP).

Zomato IPO Updates

Zomato, the food delivery company, received Rs 4,196.51 crore from 186 anchor investors on July 13 ahead of its first public offering.

The business informed exchanges that its IPO committee had finalised the allocation of 55,21,73,505 equity shares to anchor investors in conjunction with merchant bankers.

These anchor investors purchased Zomato’s equity shares at Rs 76 per share.

New World Fund Inc, American Funds, Tiger Global Investments Fund, BlackRock Global, Lansforsakringar Asienfond, Tokio Marine Life Insurance, Fidelity Funds, JPMorgan, Master Trust Bank of Japan, Morgan Stanley Investment Fund, T Rowe Price, and Canada Pension Plan Investment Board are among the prominent investors in the anchor book.

Domestic investors included SBI Mutual Fund, Axis Mutual Fund, Aditya Birla Sun Life Insurance, Kotak Mutual Fund, Nippon Life, UTI Mutual Fund, Motilal Oswal Mutual Fund, HDFC Trustee, Franklin India, HDFC Mutual Fund, ICICI Prudential, IIFL Mutual Fund, IDFC Mutual Fund, Sundaram Mutual Fund, Tata Mutual Fund, Edelweiss Trusteeship, HDFC Life Insurance, and Max Life Insurance.

Other global investors included the Government of Singapore, the Monetary Authority of Singapore, the WF Asian Smaller Companies Fund, Carmignac Portfolio, Steadview Capital Mauritius, Wellington Trust Company, Nomura, Aberdeen Global India Equity, Goldman Sachs, Schroder International, TKP Investments, Abu Dhabi Investment Authority, HSBC Global, UBS, Societe Generale, and Invesco Emerging Markets Class.

Zomato intends to collect Rs 9,375 crore via a public offering that would include a fresh issue of Rs 9,000 crore and an offer for sale of Rs 375 crore by its largest stakeholder Info Edge.
The promotion will begin accepting subscriptions on July 14 and will conclude on July 16. The issue’s price band has been set at Rs 72-76 per equity share.

The proceeds from the latest offer would be used to fund organic and inorganic growth projects totaling Rs 6,750 crore, as well as general company objectives.

SEBI and SAT

SEBI maintained that the Articles of Association (AoA) were legally enforceable and that the Companies Act enabled it to intervene in the Rs 4,000 crore fundraising agreement between PNB Housing Finance and a group of investors led by the Carlyle Group.

SEBI was submitting its case to the Securities Appellate Tribunal (SAT) on July 13 following PNB Housing’s Monday argument that the AoA was merely a bilateral arrangement. Additionally, the home financier informed SAT that it followed with Issue of Capital and Disclosure Requirement (ICDR) laws in proceeding with the transaction.

This storey is based on talks with individuals acquainted with the situation. They requested anonymity.

SEBI countered this claim by stating that the ICDR laws include more than just prices; they also cover shareholder rights. It stated that there is no conflict of interest between the AoA, the ICDR, and the Companies Act.

SEBI is entitled to interfere in this matter because it is detrimental to the minority shareholders’ interests, the regulator contended. If the AoA expressly stipulates independent appraisal, why hasn’t they (PNB Housing) conducted one, it inquired.

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On July 8, the country’s largest information technology services company reported a consolidated profit of Rs 9,008 crore for the quarter ended June 2021, a 2.6 percent sequential fall due to lower other income and missing analyst forecasts.

Consolidated profit increased by 28.5 percent year over year throughout the quarter. Other income fell by 22.6 percent quarter on quarter to Rs 721 crore in Q1FY22.

TCS reported that revenue from operations increased by 3.9 percent sequentially to Rs 45,411 crore in the quarter ended June 2021, and by a staggering 18.5 percent year on year.

Revenue at Tata Consultancy Services Ltd. increased for the fourth consecutive quarter due to deal wins as clients continued to invest on digital services amid the epidemic. India’s largest software services company maintained its fiscal year-on-year growth projection in the double digits.

TCS’ revenue increased 3.9 percent year on year to Rs 45,411 crore in the three months ended June, the company reported in an exchange filing. This compared to the Rs 45,768-crore consensus forecast of Bloomberg-followed experts.

Revenue was $6.154 billion in monetary terms. Revenue increased 4.2 percent sequentially in constant currency terms across key countries, excluding India and emerging geographies. Constant currency growth, including India, was 2.4 percent. Q1 Additional Highlights (QoQ) Net profit declined 2.5 percent to Rs 9,008 crore from Rs 9,397 crore projected. Profitability decreased by 1.2 percent to Rs 11,588 crore. TCS

TCS secured new contracts of $8.1 billion. In FY21, the corporation closed acquisitions worth $31 billion. Attrition increased somewhat to 8.3 percent.

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Retail investors are leading the charge, bidding 1.81 times their reserved amount, according to subscription data available on exchanges.

Non-institutional investors’ portion has been subscribed to at 98 percent, while employees’ piece has been subscribed to at 5%, while qualified institutional buyers have placed bids for 12,189 equity shares against their reserved portion of 22.56 lakh equity shares.

GR Infraprojects intends to raise Rs 963.3 crore through a public offering that will include an all-cash offer for current shareholders. Which includes Rs 283 crore previously raised from anchor investors at the higher end of the Rs 828-837 per share pricing band.

On July 6, road contractor GR Infraprojects raised Rs 283.33 crore from 47 anchor investors ahead of its initial public offering.

The business informed exchanges that as part of the anchor investors’ (AIs) participation in GR Infraprojects’ public offering, a total of 33,85,110 equity shares had been subscribed at a price of Rs 837 per equity share, the upper end of the price band.

Among the worldwide investors who participated in the anchor book offer were Smallcap World Fund Inc, Abu Dhabi Investment Authority, BlackRock Global Funds, The Master Trust Bank of Japan, and Fidelity.

According to the company’s statement filed with the markets, 19,18,298 equity shares (or 56.67 percent of the total anchor investors allocation) have been awarded to 13 mutual funds that applied through a total of 38 schemes.

Through the anchor book, domestic investors such as HDFC Trustee, Aditya Birla Sun Life, UTI Mutual Fund, Axis Mutual Fund, Kotak Mutual Fund, HDFC Life Insurance, Sundaram Mutual Fund, and Motilal Oswal Mutual Fund invested in GR Infraprojects.

The road engineering, procurement, and construction (EPC) company intends to collect Rs 962 crore through a public offering on July 7-9, at a price range of Rs 828-837 per equity share. GR Infraprojects is an EPC business with experience in the design and construction of different road and highway projects throughout 15 Indian states and has lately expanded into the railway industry.

Its primary business activities are essentially classified into three categories: civil construction; road and highway development on a build-operate-transfer (BOT) basis; and manufacturing.

Anand Rathi feels GR Infraprojects is well-positioned to produce healthy top-line and bottom-line growth as a result of its robust order book.

“On the valuation front, the company is accessible at a discount to its rivals at the upper end of the issue price band. In FY2021, the company posted a return on equity (RoE) of 24.0 percent, one of the highest in the industry “The brokerage stated.

GR Infraprojects Limited (GRIL) is a full-service road engineering, procurement, and construction (EPC) firm. The company has experience designing and constructing a variety of road/highway projects across 15 Indian states and has lately expanded into the railway sector.

As of March 2021, the business had a backlog of Rs 19,025.8 crore, which included 16 EPC contracts and ten HAM projects.

Image: https://unsplash.com/@karsten_wuerth

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